* § 3035. Exchange of notes or bonds of the corporation for short-term
obligations of the city. 1. The corporation may issue its notes or bonds
in exchange for short-term obligations of the city, provided that the
principal amount of the corporation's notes or bonds issued in any such
exchange shall not exceed the principal amount of such short-term
obligations and accrued interest thereon at the stated rate to the date
of such exchange.

2. (a) Upon or at any time after receipt of the short-term obligations
of the city exchanged in accordance with subdivision one hereof, the
corporation may deliver any or all of such short-term obligations to the
city for cancellation, without receiving payment of principal or
interest in respect thereof, in which event the city shall thereupon
cancel such obligations without making any payment of principal amount
or accrued interest thereon and the city shall have no further liability
with respect thereto. Notwithstanding the foregoing, the corporation
shall not deliver at any time bond anticipation notes received pursuant
to subdivision one to the city for cancellation without receiving
payment of principal or interest in respect thereof unless the mayor and
the city comptroller shall have requested in writing that such
short-term obligations be delivered for cancellation.

(b) Upon or at any time after receipt of the short-term obligations of
the city exchanged in accordance with subdivision one hereof the
corporation may exchange any or all of such short-term obligations for
other short-term obligations issued by the city pursuant to the local
finance law and the corporation may exchange any or all of such bond
anticipation notes included in such short-term obligations for bonds of
the city issued pursuant to the local finance law, all on such terms and
conditions as the corporation may deem proper.

3. The corporation shall not exchange any of its bonds or notes for
short-term obligations of the city pursuant to subdivision one hereof
unless (a) the city shall have agreed to observe the conditions set
forth in section three thousand thirty-eight of this chapter, subject to
such modifications as are permitted thereunder and as the corporation
may then approve, and (b) the board of directors of the corporation
shall have determined that the terms of such exchange will not prejudice
the rights of holders of other bonds and notes of the city.

* NB The corporation shall continue for a term ending the later of
July 1, 2008 or one year after its liabilities have been fully paid and
discharged per § 3033 sub 1.